tv Squawk Alley CNBC April 19, 2016 11:00am-12:01pm EDT
thank you for joining us on "squawk alley." john is at merge in miami, flori florida, and we will get to him later, but at post 9, kelly evans. >> good morning. >> and joining us from out west is jason calakanas who is an invester and we have a lot going on in the market, and dow and s&p 500 nasdaq posting the intraday highs today, and the dow is holding e steady above 18,000, and russell 2,000, and the dow transports are out of correction territory, but start with the netflix today, jason, because the shares have been hit hard when the company gave weaker than expected subscriber guidance for the coming quarters and 2 million additions rather than the 3 million that the investors were expecting, and also, there was a offering of prime video stand alone which was talked about on the conference call from reed
hastings, and we have that. so take a listen. >> hulu is doing great work, and amazon, and hbo and showtime, and so many competitors, and everybody is working hard to build the best content. and so we are seeing the growth in the overall internet tv market, and of course, that is displacing the linear tv, and it is natural that everybody is coming in as they real ize that the future is internet tv. >> jason, he seems to be saying that what is good for the competition is also good for us. do you buy it? >> yeah, absolutely. i think that it is a company that has defined a new category which is going to be the first company to become a unicorn not by having a billion valuation which they have done for some time, but by having 1 billion paid subscribers, and they are 8% of the way there and if they add 25 million subscribers a year, and they go on the international march and do what they did here in the country in
euro europe, asia, south america, which i believe they are capable of doing, we could be looking at what google did to advertising, and facebook did in advertising, and what google did with androi android, and we could see it happening to the entertainment business where they have hundreds of millions of paid b subscribers, and now, of course, they change the guidance a little bit and it is the entertainment business, so it is going to be hit-driven. they have had a bunch of hits, but for $8, or $9 a month, this is the greatest value in entertainment, and with millenni millennials watching the tv on the phones and the ipads and just totally giving up on the cable and subscription tv, this is is a huge, huge company, and so i would take a ten-year view of this. >> and they created a market, and think were the first movers here, and it is no doubt about that and it is now a company whose stock is down 11% today and trading at 100 times next year's earnings, saying it is is cash flow negative and burning a
million on content, and what do you do with that if you are an investor? >> well, yeah, listen, you are getting into the arms race with jeff bezos who is known for taking your margin and destroying it, and building the market share. so when i look at a company like netflix coming up against amazon, they have actually got amazon changing their game. amazon wanted to sell amazon video as part of prime. it did not work, and the people were saying, how do i get the amazon video, and so they have to copy the netflix sign and this is a good sign that jeff bezos is having to follow their strategy, so i am not worried about that at all. if you are going to be holding the stock, hold it for 5, 10 years, because we will be looking at 80 million subs and laughing saying they are at 300 million, and how possible to get 300 many million people to pay for a subscription to something, and i'm not talk about the reach, but paid subscribers. >> sure. >> it seemed impossible to build
an ad network global in nature, but google did it. it is the same thing, when you take out the frik shup and the decisions that studio executives have not been able to make based on the subscriber data, and when they stop watching a scene from "daredevil" or "house of cards" and they know who wrote the dialogue that killed the series. >> and it is the same way that warren buffett says if he wants to be in a stock and does not check the price, and even if he it does not trade, he is still comfortable being in it. >> sure. >> and you bring up this point of comparing netflix comparing it to the ad platform to facebook or netflix, and part of the appeal is not having the ads and are you talking about two-tiered thing going forward and where maybe people are resistant to the price hikes, and free option with more ads
and the two-tiered hulu approach, and where is advertising becoming a bigger part of netflix's future? >> i don't see the advertising actually, but them comparison is that googlele was able to build a ad network that transcended one region and went on the global basis. and we looked at google for a period of time saying that the u.s. is slowing down, and so much reach hitting 90% of the market in the u.s. and they claim 85, but it is probably more like 95, and so not that netflix is going to be adding advertising, but the way they grew across the borders, and direct to the consumer which has not been done. when you look at the espn and the discovery or the hbo, they have always had an intermediary, and cable networks to sell the content to or the satellite providers, and they were in the process of selling to the distributors, and netflix is in the direct one to one level of each consumer to getting the
credit card and transcendently but beautiful as a business. lit trade everything, and 400 or 500 million subscribers when we come back in 5 year to play this clip. >> and so in the next few quarters the growth there, and meanwhile, we have to move on. federal prosecutors are launching a federal investigation into whether theranos misled investors on the technology and information. and yesterday, elizabeth holmes took on questions with a $9 billion valuation as rekrecentls a year ago. and jason, this is like a onion, and you peel back each layer and each one will make you cry a little bit more. and how are the founder ss and e boards regrouping and learning from this situation? >> yeah, this is an embarrassment for silicon valley. it is just a complete and utter
train wreck, i believe. my gut tells me. i don't have all of the data it is a complete washout and going to zero. i think that it is going to be criminal, and there is going to be a lot of lawsuits for time to come. when the "wall street journal" first got the hooks into the story, and really it is pulitzer award winning group by jared cararue, and elizabeth literally attack ed the "wall street journal," and now six months later, they have her dead to rites, and everybody is coming out the criminal prosecution, and their partners are dropping them, and now she is sorry, and now on the tod"today" show, and is bizarre. the worst crisis pr, i have ever seen in my life. it is not a joke, and one thing to drop out of harvard to create a social network, and another to drop out of stanford and not get the degree in, you know, in advanced sciences, and then create a blood testing lab, and
they have attack ed the "wall street journal" every time theym come up with more data, and it is really dangerous stuff. it was never a silicon valley company, and i object to calling it that, because they did not have silicon valley board members baushlg of the generals, and the people that nothing to do with the -- >> former secretary of state, and governmental officials that was criticism lobbed at the company. and what should have a board have done in this decision, but this is a company, jason, that started 13 years ago, and this is not a freshman-level problem. >> right. it is amateur hour in terms of the management, and amateur hour in terms of the board, and i think that it is doing to be a huge fraud. if you look at how we do things in silicon valley, you have very, you know, experienced hard core venture capitalists who come in and they do due diligence,
diligence, and they bang on the technology. every venture capitalist who went to them to try to look at the technology including google ventures bill maris over there barbequed them, because he said we could not see the technology, our people were not allowed to see the technology. and i know a venture capitalist who had a person to go to work there, and they were not allowed the see the technology before they took the job so it is a circle the wagon bizarre mentality with red flag after red flag and i believe there is stuff coming out that is even more salacious, and bizarre, especially between elizabeth and this sonny bouni who is there, and i have been pinged about an inappropriate relationship going on there, and "wall street journal" on my podcast said they are investigating it, and i d t don't know, but there is going to be a crater there, and $9 billion and hundreds of millions in debt, and lost in investment, and who knows whose money is
there. >> and you will be getting a lot more pings after saying that on national television. we will talk to you soon. jason calicanis. thank you. and now, checking on the share shares of ibm after the company reported the worst revenue after close last night. the shares are down 5.5%, and john ford is going to join us from the emerge america conference, and john, the shares popped up on what is a strong top and bottom beat, and then people went through the details, and we went through the call, and they have not gotten out of negative territory. >> yeah. the numbers were not that, and not a bad quarter, and you are to keep in mind that ibm has had a run-up since february when it hit the lows arnsd the recent lows anyway, and the fundamental questions around ibm have not changed an year or two ago, it is the pain in china and the pain is in latin america, and particularly in brazil. software which is the engine of
the company, and the company was about margin of software and deploying it through people, and through service, and the software is not the engine that it once was and not showing the strong growth anymore. the question is as the legacy fall falls, will this start to show up on the top and the bottom lines. what is not clear to me is that ibm is that they are still with the people centric strategy, but we need different people, and we are moving into the cognitive computing, and the cognitive solution, and so they need watson-like help on the ios. i think that the invest or thes have to ask the fundamental question, are people still the answer in the cloud era? if not, ibm could be in trouble. if so, not as bad as at lot of people think. >> and jon, also busy in miami as you caught up with legendary skateboarder tony hawk. what did he have to say? >> i talked to him a little bit about the partnership with sony on the action cameras, and of course, he is taking on gopro as
far as that goes, a i asked him why he is excited about that. take a listen. >> i was excited to be partnering up with sony because of the camera history, and people say the gopro, but sony has the long, long history of the cameras and lenses and experience. so it was really fun to sort of sew people that there is another option there. i mean, between them and my partnership with many in the last couple of years, it is amazing, because i have had a whole new opportunity to be in marketing and advertising that i never dream ed of. >> and one of the most fascinating things about tony hawk, think about it, if you have never been on the skateboard, chances are, if you are, i don't know, 20 to 50, you know who tony hawk is, and not a lot of the athletes can claim that kind of the brand strength. michael jordan and mike tyson and joe montana, and wayne gretzky got bigger in their sports, but i asked tony hawk how he was able to build a brand
of that strength, and technology had a lot to do with it. take a listen. >> well, video games was huge with my name on it, and it is transcended the action sports, and they liked the video games. some kids think that i'm a video character and not a real person. >> on stage here at emerge, he told me that activision offered him half a million to sort of buy out his royalty rights after the game came out, and he had been having trouble, and he thought about it, but he had stabilize so he thought that if they believe this game is that good maybe i ought to stick with it, and the best financial decision he made, and within a year or two he had made that half a million and e sequels upon sequels, and the gift that ep keeps on giving for tony hawk, guys. >> maybe he is a video game character then, jon. great stuff, and i love to hear
about it. jon fortt down there in miami. and we will have exclusive coverage for all day. later on "power lunch" bob grifeld, and then we will be speaking with mr. worldwide himself, the musician and entrepreneur pitbull at 1:00 p.m. eastern time. and now, looking at the dow up 63 points despite the earnings misses and the share reaction with netflix, and ibm. and goldman seeing a nice gain after ceo lloyd blan kkenstein said that they have more shares. and there have also been earnings citing the political climate as well.
yes, and we will hear more about that as well. and as apple is testifying on capitol hill, we will talk to google's head of security. and also, keith meister, a one-time carl icahn protege is going to be with us, and another rough quarter ahead for yahoo, and a top analyst going to tell us what to expect on earn ining after the bell. "squawk alley" is after the break. you shouldn't have to go far
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welcome back to squawk alley and you are looking at capitol hill where apple is test iffying about a case on the iphone, and we will bring you any updates. and the world's most popular operating system is more secure than ever. we have josh lipton in san francisco with that story. hi, josh. >> well, kelly, google is out with a new report today detailing how it protects the 1 billion android devices. last year google performed over 400 million checks of devices per day for security issues, and helped to find and wipe over 200,000 lost or stolen devices per day, and checked over 6 billion installed apps everyday installed for malware. and one other point that chief adrian ludwig points out, less than 0.5% of apps installed had a potentially dangerous app installed. >> i don't believe that the apps
are getting worse, but the defenses are working faster than the attacks in the mobile space anyway. >> and not everybody is android fan though, because critics say they are less secure than iphone s, because they control the hardware and software, and we know that with the hardware p t partners like samsung and htc have varying degrees of security, but google counters that it is actually an advant e advantage. >> there is not any single team that is the most effective team in the world. i think that in practice, you want the bring in as many people as possible from as many walks of life, if you are will. that mean having different security teams at different oems in the context of android, and lots of companies that are investing in security. >> and ludwig says that google is investing more every year in android security both in terms of the people and resources. the company paid security researchers more than $200,000
to fix more than 100 vulnerabiliti vulnerabilities. kelly, back to you. >> and yes, even as the european regulators are looking at the android practices. josh, keep an eye on it, thank you. and up next, keith meister is going to sit down with david faber and he is a whole food brand supporter, and we will see what that means in other markets.
welcome back, and let's get back to david faber with another investor and heavyweighter with the investor summit. keith mice te of corvex management. >> yes, keith meister is joining us and also a board member of yum and other brand s s in the news, and i have to ask you, will you comment, that you have a merger agreement with ete, and as a board member, how do you
view the current situation to put it mildly that is somewhat hostile between the two partners? >> well, david, thanks for having me, and thrilled to be here at the 13d monitor conference, and so thrilled to participate. in terms of the williams e.t. as you suggested, i'm limited to what i can say as drirector and largest shareholder of the company. as a director, williams has put out several, and i will say the following, several public statement, and the most recent is april 6th, they filed a press relief in which we stated a unanimous consent to the enforcement of the merger benefits to the transactions of the shareholderers and commence litigation to help ensure that our shareholders would get benefits of the merger that the williams' board did a fantastic job on behalf of the shareholders to bargaining for, and our goal is to get the benefits of the agreement. our board continues to recommend the transaction, and we are seeking to get a registration statement effective to mail and have a meeting and close soon
thereafter as possible. >> right. i wonder as a board member, to the things they have been reporting this morning, for example, the efforts in the belief of some that kelsey warren, the man who runs ete to put it bluntly by lowering protections in s4 that are below what people believe they should be, and issuance of the convertible, and you mentioned the lawsuit to try to rescind that to the insiders and most recently having latham and watkins and say having, but unbleer what happened and offer a necessary opinion on the taxable nature of the transaction that it needs in order to go forward. and what are you thinking when you sit as a board member and see all of these things happen by the partner? >> well, so, there is a lot to the question. and there has been at lot of the market commentary around it. it is not appropriate as h me in
a board member to he said/she said debate. but stepping back as a large shareholder here, you laid down a lot of good points removed from many. remove ourselves from the noise. that is what it is, noise. right now, we are going through the period of the us versus them. in some point it is presented to the shareholder vote when they vote to support it, it is us versus them to we. that is very, very important, because everybody is focused on the noise that you are commenting about versus why the williams' board entered into the transaction or why i as a shareholder support the transaction, and the we here is a pro forma story, and the williams board did a great job to get more than a fair value for the williams' shareholders, but there is a great deal of value for the williams and ete and it is going to be the lar largest infrastructure company, and scale and access to capital and reach to get a tremendous
part of the growing story which is low natural gas prices driving the demand for volumes, and the volumes will flow through the williams pipeline, and lots of chances for siner ji and growth. so if you step back and say since january and february, the energy stocks have rebounded and specifically the mid range like kinder morgan, spectra and columbia. >> rebound is a nice way to put it. because they crashed and they are slowly rebounded. >> up 25% to 30%. >> yes. >> and williams is down 20%, and so everybody is focus ed thsed the e.t. is down, but it is not the performance of the businesses, but the purgatory the of being in a transaction of he said/she said, and what i am trying to make money for my investors at corvex is the transaction getting closed and focusing on the industrialogic. and this is so important for the next week or next quarter, but
it is more important for the next decade. because we will find lots of low-cost gas using technology, and that gas has to flow through someone's system, and no company in my opinion better positioned for the next several decades than williams e.t. to take advantage of that, and so there is a huge prize here, and it is a lot of pain and we are near the end, and we should focus on the prize in the future. >> maybe a few court dates to come. and now, moving on to the the other boards that you are on, yum, and there is no contention and they are doing what they hoped for when you were active with the stock is to take the china's part and spin it off to another company, and maybe a chance of selling a 9% stake in that business or majority stake for someone who might want to buy it. is that a possibility? >> well, i joined the yum board in october with the alignment of interests around the plan that yum was about to publicly articulate to spin off the china business that one plus one is more than equal to two, but the
business has different needs for capital and growth and risk and would it function as two independent companies? i have been thrilled to work with the yum management team, and they have built a incredible business and the board is first-rate experienced ex-ceos and we are separating the businesses with one goal to create the most value for the shareholders, and the rumors did somebody looking to bid at 19.9 or buy the whole thing, other than if somebody wants to buy 19.9 of the business at a valuation that is attractive for the yum shareholders, i will guarantee you that the board is going to what is right to drive the value. >> more than the $8 billion that someone is saying? >> i don't know where the number came from, because i believe they confused the revenue with the business. that is the revenue, but it is a business worth a multiple of that. and it is trailing numbers after a frap chiz fee, and we will report the numbers later in the
week, so i won't preview it, but we have publicly guided to 10% growth, and 15% growth thereafter. we have a great new management team, and the transactions comp in the place are 14 or 15 times eb ebita and i would tell you that selling this business is not a right thing, and nobody would disagree with that >> keith, you were on the board, and just as a reference point, given what you have had to go through there, do you believe that three times or ten times or more when you go on the board? >> well, you should think many times when you go on the board. when you are on the board, you are part of the solution, and you have a liquid, and the boards have one voice, and you have opinions, but you have to come together as a board to express the voice. one, you have to believe that you are paid for the liquidity, and two, you are to believe that you can add value for the shareholders and three, understand that if you can work with the rest of the
constituents and sum of the parts to make the other board members better, and own the business through a sick cycle. there is great times to go on the boards, and williams and yum are two great examples, because they have long potential and we felt at corvex that there was v value, and so what happens with williams? you roll up the sleeves, and what is lost is that the business is is growing, and e.t.'s business is growing, and they are just going through the period of tremendous uncertainty, so if you look at the arbitrage trade, the deal is supposed to close in give or take 6f 0 day0 days, and so it annualized degree of fear, and you is said it is iron clad and negotiated by latham and watkins, and kor vath, and a great law firm, and other hostiles wanting to come in to
match all of the terms, and they matched the terms, and yet the arms spread is trade thing at a wide spread. it is a function of fear and i'm con confident when the fear removes and people can focus on the business, there is a substantial rerati rerating, and silt our job to make sure that all of the shareholders can get that benef benefit. >> keith, so much more that we could talk about, and to your relief, i will bet that we are done there. >> and yes, i will see you next year. >> and maybe sooner. keith mieister, and founder of corvex manager, and board member of yum and williams. >> thank you, david. >> and we will sit down with the blue harbor group, and get a different perspective on the names that we are discuss iing everyday. >> yes, ete was on the move in the interview, and they were hanging on every word, especially if you are a shareholder. and now, with the agreement to be reached at doha, and we
have simon with that. >> and you can see it is moving above, and the ftse is moving with the highs of the year for the european general, because the losses were so big, but it is very green on the screen. the bank mark carney is in front of the house of lords committee as he is defending his role as president of the banking committee of the euu and h says that a vote could leave would develop some uncertainty, and he says that the referendum may be getting too manifest, and you will be knowing that there was a interview in this country where he said that the brexit is not going the happen, and he is arguing logic, and the logically, the referendum should not take place on logical arlg yumts, and that is why it is so dangerous. but it is an interesting place
where the market is positioned if gundlach believes that. and today, l'oreal is confirming the north america's dynamism that they have been rising by 3%, and real signs of life there. and i want to show you the eu competition of margaret investiture that it is increasingly reported that she is about to charge alphabet or google android for preinstalling apps on the android phone, and therefore counter iing competitn within the european union. my assumption is that she is going to have to ask the commissioner to sip off on this charge gaiagainst alphabet if is coming. they generally meet on the wednesday, so by tomorrow, we will get that. this is similar of course to ten years ago to the bundling argument of microsoft when they were e preinstalling apps then that they felt they shouldn't. >> apps, software browsers or
whatever they were called back then. >> i am trying to make the young people understand what i am talking about, sorry if i got that wrong. >> thank you, simon. appreciate it. >> and shares have been volatile throughout the morning with the bell, and shares are up a fraction, and so should you be buying or selling before the close? is we will have more when sigh kwauk alley" returns.
everyone. i'm sue herera, and this is the cnbc update. at least one person was killed and nine injured out sooside of tax office in northwestern pakistan. the attacker fired shots before detonating the explosive device, and splinter faction of the taliban claimed responsible. >> and now, king a abdullah is meeting with french president hollande saying they are facing a threat of extremism. and governor snyder drank a glass of water from the filtered water, and said it is safe and took five gallons with him. >> and donald trump voting at a synagogue in new york city as voters in new york take to the po polls, but last night in buffalo, he blundered a tribute
to 9/11 and referring to a convenience store with a similar name. >> i was down there watching the police and the fire down there at 7-eleven, and i saw the greatest people i have ever seen in action. >> whoops, that is the cnbc update this hour. back downtown. >> and sue, i cringe hearing, that and listen, anybody who speaks in public, god forbid that happens to any of us. >> absolutely. and it is unfortunate, and i am sure that he regrets it very much. >> and the london bombings, and they refer to them as 7/7, and it is a tragic -- >> exactly, exact ly. you are right, kel. >> thank you, sue herera. >> and our netflix are weaker guidance, and the stocks are lower than 10%, and the next guest is tracking yahoo! after the bell, and jeff smith joined us earlier on "squawk on the street" and this is what he had
to say. >> the nice thing about this asset is that it is a sought-after asset with one of the most recognized brand s s i the world, and billion unique users and unbelievable properties, and if you look at the fundamentals, and you will see 4 billion or 8 billion or 10 billion plus for the asset if they cared about it, but it depends what they are going to do with it. >> and mark mchanie joining us with the nbc capitalcapitalistss we hear the drip, drip, drip here, it depends what they want to do with it if they want to buy the company? >> exa private equity or financial buyer or strategic buyer. strategic is going the bid more because of the strategic effort to the asset. the numbers are like this, yahoo is going to be generating $800 million in ebita,and probably
not taken out is more than $10 billion, and much less than the financial buyer would bid for it. $7 billion may be ag grgressive too, and core yahoo is going to be trading at probably before the end of the year is said and done and then work out all of the intricacies of the alibaba stakes and others. >> i am curious if you made anything out of jeff smith's comment comments about the conversations with the company to potentially settle this forth coming proxy battle, and he se nominating a whole slate, but he would not say how many board seats it would take for them to call it a settlement, but i am curious if you are thinking that it is a positive for the stock, and potentially a positive for the company, and they have one less distraction? >> yes, i believe it is incremental positive, and the major positive that the market, the financial markets want to see here are either a resolution
of the action here either we will have this thing sold, spun off or not. we have been waiting on that for nine months and a couple of false starts in the attempt to spin off the alibaba or reverse stake stakes, and so we want to have a conclusion as to whether are there is a fundamental turn around. the numbers that the company has put up have not shown a fundamental turn around, and so we want some resolution on either of those, and h my guess is the action, the strategic action is going to be the resolutio resolution, and we will see it before the end of the year. >> and mark, if we could pivot to the shares of knelt flix under pressure this morn, and the international figure is a head scratcher, so why so much deceleration there next quarter or is the company low-balling it? >> well, i don't know if they are low-balling it. look, we got the stock wrong, and we have had a buy on it since the bebeginning of the year, and it has underperformed, but it is all right, because we believe that there is a path to well over 1 million subscribers
and getting the timing right is difficult, and this is a high bar stock out of each and every print, and ta have to hit the high bar on the national and int international subs and they got it right on the quarter, a sobd there is a high bar stock, and that risk to it. and the risk that the street mad is the extrapolation when they launched 130 markets the year, people assumed a hard launch, but it is not. it is a very is soft launch. you will see the sub level risings for the next twoer years to power the stock higher. >> and questions, mark, about whether or not netflix would have ambitions in live tv, and what facebook and twitter and so many other companies are calling the future of content. and right now, hastings is asked about live sports, and he is trying to talk about chelsea handl handler's upcoming show saying a couple of hour delay, but the brand proposition for them is on demand and not live, and that the right strategy? >> well, i think so.
look, they have built up over 80 million subscribers, and we think on a path to doubling that and kind of getting at hbo-like levels and being able to generate that kind of, those kinds of margins, and call it 4% ebita margin, and there is a large marketplace for the right to stick to the knitting, and focus on that. anything live would be a possible distraction, and a small ancillary to that. >> mark, thank you for joining us. we appreciate it. checking on the shares of netflix and rbc's ceo rick mahaney. now, over to rick santorelli over at the offices. >> and there are doubts of the dow jones industrial averages,
and nobody has any doubt. the doubt is about the economy which makes trading so hard. if if central bankers were on your side, you would have a tailwind, and right now, we are in the sweet spot for stocks. and we have been talking about it for a while, but the problem is if the central bankers get the reins yanked away, and decide to normalize in a more aggressive action, it is like pulling off the tablecloth, and everything on top is not going to be staying put, but a mess. so it is charts versus the central banks. i want to look at the foreign exchange, because it is difficult there. is no real measurement, and you can't measure the dow independently, and it is against the yen and the euro and all of that, and it is like the "alice in wonderland" direction ashs fnd you wanted to go to the reality, the ruler can't slink with everything else. here is a constant ruler if you buried $1 million in 1913 and next to it a million in gold, your cash position would be
$20,000, and the gold worth $62 million and there is a ruler that doesn't shrink down the rabbit hole. and now, look at the three-year charts, the euro and the dollar, and the dollar index here and these are three-year charts, and mirror image, and this is swup of the poi d -- that is one of the points. and if you break it down, you can just look at the euro, and on the three-year chart, you reverse the dollar, it is a wedge-shaped formation, and if you draw the line, it is broken out, and too bad in a way, because the pattern went down, but it is looking like a breakdown in the upside down euro, and the tlar is the same with a couple of details, and consolidation and different angle on the wedge, but all things equal, it is broke u.n. down, but are the breakouts broken? see, this is the problem, you have heard me and ira harrison and people who have understood trading talk about the one thing with the central bankers kind of nudging the market to extraordinary degree, and the
thumb on the scale or any way you want to phrase it, you don't know if the market signals are correct, and after looking at this, and everything i have said, i know it is a breakout, but most likely, you are going the to be getting more sideways activity. kayla, back to you. >> all right. we will be watching that rick santelli in chicago. thank you. and up next, what does the future hold for the movie watchers in the age of streaming? we will look at one of of the most popular chains around the alamo stackhouse.
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all right. coming up on the "halftime report" we have seen this movie, the stocking back to the all-time highs and can the rally keep on going? and jim cramer said don't do anything with ibm until you hear from analyst tony sagnaki and you will in our hour. and what tom najarian just did with netflix shares after that guidance. that is about ten minutes away. >> all right. scott, thank you. and we will look at the mid-week shares, and of course, the advent of netflix, and other streaming services are forcing movie theaters to think of new ways to get and keep people in their seats. and remember, there was an idea that floated about texting in theaters which was met by backla backlash. and now, the ceo of alamo drafthouse making a few statements here, and once the
viewers see what you are wearing here. tim, i want to talk about the netflix, because alamo drafthouse was founded 20 years ago and you have operated in the prestreaming and the post streaming world, and what is it about your experience that keeps people coming back for more and not just netflixing and chill? >> well, it is a little bit of the red herring argument. i believe that we are in this business of entertaining people when they get out of the house, so no matter how good the options are, and i'm a big fan of the netflix, and i watch a lot of content at home, but i want to get out of the house. so as long as we can make sin na ma a compelling case to compete against restaurants and bars, we are in grat shape. >> are you competing for movies against the likes of netflix and other services bidding directly with the studios? >> not in any significant way, and netflix has picked up high profile pictures, be through is a lot of content out there. and i was at sin na cinema cona looked at the slate of content, and it is amazing, so i al
bullish on the history. >> and what if the screening room launches and to your point, you want to get out of the house sometimes burk kit can be a lot of work, and you want to stay in the pjs and have that glass of wine, and so would you be up to people watching more movies in the living rooms? >> well, that is something that the people have to decide whether they want to watch it main the living rooms or go out to the cinemas. but the screening room, and the interesting take away from cinema conis that there is a clear message from the studios, we will make the decision together, cinemas and theaters, because it was heavily emphasized last week at cinema con. >> and how do you emphasize things in the theaters if things like twitterer posting or texting is outlawed? >> well, the customers have not changed that much, and what we
need to present is a beautiful experience, and people are more discerning, and the feedback loop is a lot faster. if you are not having a good experience, you are crucified by it. so we need a bright picture, and clean facility, and great sound and great movies, and getting back to the basics. >> but are people on the phone anyway on silent? do you reinforcement? >> yes, and i would like the entire industry to be rigorous, because regardless of the age, a true cinemaphile want ts to get lost. it does not matter if you are a millennial or a man like me, it is going to remain the same. >> you have a bernie shirt on and it is primary day in new york, and people with bernie and hillary all over the place, and you are also an entrepreneur and business guy, so is bernie going to be good with business or do you not care and voting for other reasons? >> well, again, that is the wrong question. i think that bernie is good for america. and my biggest challenge with
politics is the first time that i felt fully engaged in politics in a long time, because i have a candidate i can believe in and trust, and that is why i am coming to wall street with this shirt today. >> and yes, they are going to be hauling you out of here. >> i think so. >> and i take it that you did not find it from the thriftshop from the 1980s. >> i have eight t-shirts that i wear in rotation. >> well, you know what day it is and what state it is that you are in. thank you, so much. >> thanks, guys. >> and now, instagram is looking better by the number, and we will talk about a new acquisition when we come back. [alarm beeps] ♪
after a primary battle in new york, how will the voters decide? and how does it affect wall street? and will coca-cola pop? tomorrow on "squawk box ". >> instagram shares are looking good. remember, that they bought the company for $1 billion, because it is mostly stock, and today a note from credit suisse says that i will more than triple the price tag in revenue alone. instagram had 30 million active
compared to 400 million as of late last year, and remember at the time, it got so much criticism, because it was right at the time that the company was going public, and shares that did not exist, and hindsight is 20/20. >> and instagram is a great form, but do you believe it is pe peaked? >> well, i will tell you when i use it less. >> you are a much better barometer than me. >> and you have a great lineup on "closing bell" and tell us about who you have? >> we have c.c. smith, and the star of silicon valley thomas middleditch and we will talk to him about the shares. >> and "game of thrones" and "veep" and "silicon valley" coming up on sunday night, and they like to stack their shows. >> yes, they have trendy ways to get a lot of interest. >> it is like "star wars "ti way
they release the trailers in peace miele. pieceme piecemeal. >> and now, to see if they are losing some of the steam, we will go to scott wapner and "the halftime report ". >> all right. kayla, thank you so much. welcome to the "halftime report." i'm scott wapner, and the lackluster earnings as we talk about our panel. they are with us for the hour. and let's begin with the stocks rising again, and the dow and the s&p 500 now less than 2% from the all-time highs. crude is up nearly 4%, and the dollar is weaker this hour, and the transports are moving out of correction territory, and pete najarian, can this continue? we are back to the new highs, and is this time different than